The wheels are officially in motion for Avaya to become a public company again.
Avaya on Thursday filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC), the usual first step toward an initial public offering (IPO). Avaya did not disclose how many shares it will sell, or an expected price range, or whether it will be traded on the New York Stock Exchange or the NASDAQ, but said the IPO will be for $1 billion of its common stock.
Avaya's potential IPO plans were first reported earlier this week by The Wall Street Journal. Avaya plans to use IPO proceeds to repay debt, redeem preferred sharees and pay fees to sponsors.
According to the filing, Avaya, for its fiscal year ended Sept. 30, 2010, generated revenue of $5.06 billion, and for the first six months of its fiscal 2011, ended March 31, 2011, generated revenue of about $2.76 billion. In Avaya's fiscal 2010, product revenue represented 51 percent of total revenue, and services represented 49 percent, and 55 percent of revenue was generated in the United States.
For the year ended Sept. 30, 2010, Avaya had a net loss of $871 million. For the first six months of its fiscal 2011, ended March 31, 2011, it had a net loss of $612 million, which was wider than the $421 million in the same period a year earlier.
In its S-1 filing, Avaya describes competitors' solutions as "inadequate" to meet the needs of businesses seeking collaboration tools. Most collaboration solutions are one-size-fits all, Avaya argues, and many solutions are also closed and proprietary, as well as built "from an e-mail or data networking focus, not for real-time collaboration."
The addressable market, Avaya says, is huge, citing industry analyst estimates of $77 billion for business collaboration markets comprising unified communications, contact center applications, data networking equipment and the support and maintenance services to support them.
"We believe that the trend toward a more mobile workforce and the proliferation of devices and applications creates a significant market opportunity for business collaboration," Avaya wrote in the S-1 filing. "In addition, we believe that the limitations of traditional collaboration solutions present an opportunity for differentiated vendors to gain market share."
Avaya was taken private in 2007 for $8.2 billion by private equity firms Silver Lake and TPG Capital. The company was created in 2000, originally a spin-off of Lucent Technologies.
During its era as a private company, Avaya's most notable event has been the 2009 acquisition of Nortel's former enterprise unit -- a move that helped propel Avaya to what most projections have as the No. 1 market share for enterprise telephony. Avaya is tightly aligned with a number of strategic vendor partners, particularly HP, with whom it has a common enemy in Cisco.
Joint book-runners of the IPO will be Morgan Stanley & Co. LLC, Goldman Sachs & Co., JP Morgan Securities LLC, Citigroup Global Markets Inc, Deutsche Bank Securities Inc., BoFA Merrill Lynch, Barclays Capital, UBS Investment Bank and Credit Suisse Securities (USA) LLC.
Avaya declined further comment on the filing Thursday.